We’ve sent a copy of the Importance of Bonds in a Quality Financial Plan to the email address provided. You can also click below to download a copy.
Bonds can be appropriate investment vehicles for retirees seeking income. However, you should have a firm grasp of the numbers before embarking on the journey.
During the latter part of the 20th century, the word “bonds” seemed to disappear from the investing lexicon. There was so much money to be made in stocks with so little apparent equity risk, that bonds simply fell off the popular radar screen. Even many financial advisors who had preached the value of asset allocation conceded that bonds did not necessarily have to occupy a place in everyone’s investment portfolio. Yes, they said, it is appropriate for some people to place 100% of their assets in stocks, especially if they have a high-risk tolerance and a long time horizon. Bonds offer limited growth, and they typically don’t lend to inflation protection, so they really aren’t appropriate for everyone.
Besides, who would settle for single-digit returns when potential double-digit returns are available for the asking?
The Bond Revival
Then bonds came back, and many people remembered those other features, namely income and stability, that often make bonds strategic companions to stocks in a well-rounded investment portfolio. The purpose of asset allocation came back to us (before some investors obsession with short-term returns almost made us forget). Bonds cover all our bases through a variety of market environments. Learn more by downloading the Importance of Bonds in a Quality Financial Plan.
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